Recently had a similar situation at my place. Repeated requests to the neighbor were ignored. Finally called the county dog catcher, who first warned, then ticketed, the neighbor. At that point they put up a fence (though it's one of those portable electric fences) and the chasing and lunging stopped. But the dog's still there behind the fence, still barking with hackles up. Like you, I can't do anything unless it attacks me or my livestock (which I don't have). But given the next chance to SSS, I will. And I'll feel bad for the dog, but the real problem is the owners. They know or respect no limits unless they're forced to back down through confrontation. Heck of a way to live, but it's either that or move, which I'm not going to do.
That said, if the county hadn't intervened, my next step was to have my attorney write a firmly worded letter threatening a law suit. And if that didn't work they'd be in court. That usually makes enough of an impression to get people to change their ways. It also puts law enforcement on notice that there's a problem, so that next time they know who to blame. That's hard on neighbor relations, but being laid up from a dog bite is a lot harder.
Good luck with your situation, but unfortunately the only way I see it ending is by putting down the dog.
